The socket has been introduced in pre-colonial Malaysia .Before the British colonial Malaysia, the village in the country, as in other parts of the world developed through land settlement or colonization. One of the popular methods was the “collective Pondok system”, which was particularly common in the Muda Region of Kedah. By this system, a group of settlers would gather around and a person who is well -versed in Islamic Knowledge or who had already established himself as a religious teacher .After the they found a suitable place , they will build their “Pondok” (huts) around a Madras; a religious center for worship as well as teaching. In the case where the group has been established, they would invite a religious teacher from elsewhere to set up a Madras among them .This religious teacher was also the “Imam” of the community, in the sense that he led five prayers daily in the mosque or “madsarah.”
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The group of peasant will be going out to open land around the clusters of their “Pondok”, leaving their children to the teacher for religious education at day time. For those wives who are unable to work with their spouse in the land also will obtained religious instruction from the teacher. The peasants will receive religious at least one or twice a week and longer on Friday because it was a day of rest. They will spend more time in the mosque than the field.
As an appreciation for the service provided by the teacher, the peasants usually will collectively clear a piece of land and cultivate if for the teacher. Slowly, as the land become more productive and the production level of each peasant family exceeds the “nisab of 480 Gantang” [1] for each harvesting; the peasant family would pay skate at their 10 % of the gross yield of the paddy. According to “Afifudin”, those early days all the skate form a specific group in the Pondok system would go to the teacher. If a group of 50 sacked paying peasants would contribute a minimum of 2400 Gantang each year .As time goes by, the wealth of the teacher can be accumulated. The teacher can use the socket for the expansion of Madras.
During the colonial period in Malaysia especially Kelantan, Zakat was administered by imam, who is the local religious leader managed the Zakat collection and supervised by the division of inherited party. In order to finance the intensified activities, the state required imams to surrender part of the Zakat they collected at the village level. However, this method is only partially successful due to the British regime replaced Grahman’s, the “Islamic administration” .The Grahman took charge of civil administration, he divested the imams of their “civil” function .which were transfer to the headman (ketua kampong).
According to secret institution in Malaysia .During British Colonial Period, The segregation between religions, custom and temporal matters took place during this period. All Islamic and Malay customs related matters were administered by a special body known as Majlis Agama Islam Negeri (MAIN). Other than that, the rest came under the purview of the British civil and criminal law system (Matters associated with socket were administered by MAIN. Accordingly, in Zakat Satu Tinjauan, Kelantan was the first state to establish the body which later became a model to other Malay States. Under this model, the Imam (spiritual leader) has been empowered to govern skate related matters and a portion of Zakat collection would be delivered to the state government as a financial resource for Islamic affairs. That was how the administration of soaked developed until today which remain under the supervision of State Islamic Councils.
After the independence of Malaysia, New Economic Policy has been introduced. The Zakat fund is use for investment purpose .In the early 1970s ,the minister of National and Rural Development, Encik Ghaffae Baba, who was also the chairman of Mara ,urged all the state Religious Councils to invested substantial portion of their money (mostly derived from the collection of Zakat) in Amanah Saham Mara .The objective is to eliminate the income gap between the ethnic group in Malaysia, especially the Muslim and Chinese.
DEFINATION AND CONCEPT
In the Islamic world, Muslims are required to give compulsory charity with determined purpose and established rules. This compulsory charity is known as Zakat. Zakat is one of the five fundamental pillars of Islam; it stands as the third pillar of Islam, just after Salat, the daily ritual prayer. Allah has mentioned Zakat about twenty times in the Holy Qur’an combined with Salat.
Basically, Zakat, or Zakat al-Mal, means obligatory “alms” or “alms upon wealth”. Alms is a gift of money, clothes or food, it is equivalent to charity and is a type of donation. Moreover, Zakat is literally means “to be clear, to grow, to increase”. It comes from the root letter “za, kaf, ya” which consists of few meanings, which are to be clean, to pay the obligatory charity, to be pure innocent, to be better in purity and to praise oneself, to justify. All of these have been included in the Quran and explain all of these things.
In addition, Zakat can be defined as the transferring ownership of an amount of material wealth specified by the Lawgiver to a poor Muslim who is neither Hashimi nor their client, without material benefit returning to the giver in any way, for the sake of Allah Most High. [Tumurtashi, Tanwir al-Absar] Hashimi in here means those from the family of the Prophet (Allah bless him and give him peace).
Besides, the term “Zakat” and “sadaqah” are often used interchangeably in the Quran and Sunnah, where “sadaqah” also means charity. However, Zakat refers to obligatory charity and sadaqah refers to voluntary charity. Zakat can be categorized into two types; there are Zakat-ul-Maal (Zakat on the wealth) and Zakat-ul-Fitr (Zakat on the individual). It is recommended to every Muslim to pay sadaqah after paid the two types of Zakat.
Other than that, Allah has prescribed Zakat as a duty to Allah, upon every wealthy individual. Every Muslim also has “nisab”, which is a designated minimal amount of wealth for the full cycle of a lunar year must, as a matter of worship, satisfy the duty of Zakat-Charity. This charity is to cleanse or purify the individual’s wealth. Unlike charity, Zakat can only give to Muslim; it is not valid to give Zakat to a non-Muslim.
THE OBJECTIVE OF ZAKAT
The primary objective of Zakat is to elevate the spirit of human being above the material acquisition. Consequently, Islam does not view the Zakat payer as a mere of sore of funds, but as a person who always needs purification and cleansing, both spiritually and materially .The prophet (p) summaries this purpose in the ayat ,”sadaqa from heir wealth by which you might purify and cleanse them.
Zakat, when paid out of submission to the command of Allah, is a mean of purifying the soul of a Muslim from greed and miserliness. The vices of selfishness and greed must be controlled in order for human beings to elevate their spirits, to succeed in their social relations in his life, and gain admittance to paradise .Allah Almighty says, “Truly man is niggardly! (17:100) and “But people are prone to selfish greed.)Zakat is a purifier that trains Muslims to give and spend selflessly .It liberates their souls from the love of wealth and slavery to materials gains and acquisitions.
On top of that, Zakat is a mean of training Muslims on virtues of generosity as much as it is a means of purification from greed .Being paid in repetitive pattern year after year, regular Zakat as well as Zakat al-fitr train Muslims to give and spend for charitable purpose. The Qur’an describes believers as the righteous who have the virtue of spending for good reasons. The very second sura of the Qur’an begins, “Alif .Lam .Mim.That is the Book with no doubt .In it is guidance for the god-fearing: those who believe in Unseen and establish the prayer and give of what we have provided for them.”This exhortation is reiterated many times in the Qur’an ,such as “Those who give away their wealth by night and by day ,secretly and openly ,”: “Those who give in times of both ease and hardship” and “The steadfast ,the truthful ,the obedient ,the givers ,and those who seek forgiveness before dawn.”
Also, once a person is trained to spend on public interests and to give to his brethren out of his own wealth, he is most likely to be freed from any urge to transgress on other people’s wealth and possessions.
Besides that, Zakat trains people to acquire divine characteristic. If man purified of miserliness and greed and becomes accustomed to the habit of giving and spending, his soul is elevated above low human trait of covetousness, “Truly man is niggardly!” (17:100) and aspire to the height of Divine perfection, since one of the characteristic of Allah is absolute and unlimited mercy, powers, theoretical and practical .Allah obliges Zakat in order to perfect human souls in graciousness to other people ,as the prophet says, Train yourselves to attributes of Allah. This encouragement to spend through Zakat and voluntary charity resulted with time, you in the emergence of charitable trusts all over Muslim world, trusts devoted not only to helping the poor and needy but to all causes for human beings as well as animals.
In addition, Zakat is to shows expression of thankfulness to Allah .Gratitude and thankfulness are among the best characteristics of human beings. Zakat is an expression of thankfulness to Allah for the bounties .He gives on us .Allah, says al-Ghazali, and has gives on human spiritual and materials bounties. Prayers and other acts of physical worship express gratitude for the blessing of creation, while Zakat and other acts of donator worship express gratitude for the material blessings of Allah .The concept that Zakat is thanks Allah for His bounties is s widespread and deeply rooted in the consciousness of Muslims that it is common to say that one must give Zakat in thanks for the grace of sight, hearing, health, knowledge, etc.
Also, Zakat stimulates personality growth in those who pay it .Through helping others overcome their financial difficulties, Zakat payers are enriched by feelings of self-worth and fulfillment. Zakat also helps offer the payer’s self to others and grow through helping them and gives the payer a noble sense of victory over his base desires and material drives-over his owns shaytan.
Last but not least, Zakat is to purify wealth. This is because Zakat is a right to the poor, not paying it means keeping something that belongs to others intermingled worth one’s wealth and this brings Allah’s wrath on the whole wealth. The Prophet (p) says, “If you pay Zakat on your wealth, you have taken away its evil.”
IMPACT OF ZAKAT IN SOCIETY
Undeniable, the concept of Zakat is the cornerstone in Islamic finance and economic system. Zakat is a compulsory charity that every Muslim must pay and to help the poor people. This has causes Zakat play an important role in the society, especially the Muslims society. Below are several impacts brought by Zakat system?
The Zakat system helps to make sure the society’s wealth circulation is in a fair and clean condition. Due to the wealth people must pay Zakat to the poor, the wealth will not become too rich whereas the poor will not become poorer. Definitely, there are some restrictions in order to choose the Zakat recipients, the restrictions can make sure those who receive the Zakat is with a reasonable and acceptable reason. In this case, Zakat has becomes the duty of wealth people, just like a compulsory charity must done by wealth people. But, the percentage of Zakat paid is depends on the wealth of an individual, it is not a system that forces people to pay a certain amount, but is require Muslims to pay their minimum amount according to their wealth which is affordable.
Zakat also allows an individual to purify and grow his wealth. Man is naturally greedy and always want more and more to fulfil their unlimited utility. Zakat, with the obligatory charity, require Muslims to do charity. This process might make the people to think of others and come out from the race of personal interests. It has help to cleanse the selfishness of an individual where someone may extend his financial in order to help more poor people and those in need. The Holy Quran also has mentioned that “And whose is saved from his own avarice such are they who are successful.” With more and more individual with this personality can maintain the peacefulness of the society and becomes the role model for the next generation.
Besides, Zakat system has helped to reduce the poverty problem in many countries. The main reason for poverty in any society is the concentration of wealth is limited to a very few people in a particular country. The introduction of Zakat system is actually for the purpose of this root cause of poverty. If everyone will need to pay Zakat, no poor or the unfortunate would have to involve in the begging. As the wealth is distributes to the poor, the poor will have the ability to continue struggling for their lives. In addition, Islam has prohibited the poor or needy from stretching hand before others.
In the economic perspective, Zakat has also help to increase the production volume. When the Zakat has distributed to the poor and people in need, they would spend the money to satisfy their personal needs or basic needs, which then results in the increase of production volume. A rich individual however, will not need to spend too much money in order to fulfil their needs in life. Even the one wants to spend much, it will not more than a group of poorer spending money for basic needs.
Moreover, the increase in production volume will led to the rise of several economic activities. In order to support the increased production, the economy would generate more jobs and more working opportunities which causes the unemployment level tends to reduce with the growth of economy in overall. The rise of job opportunities will then generates more demand of goods and services and more space for additional investment. And, finally, the growth cycle will lead to a balanced economic growth. Other than that, the Zakat system also will increase the overall savings of people, although with the concept of discouraging of over storage of money for an individual. Consequently, the income level of a society also has increased. All of these economic activities will led to the decrease in probability of economic recession. As the Zakat system is used to balance the wealth between the rich and poor, the chance of recession can be reduced.
The impact brought by Zakat towards economic has improved the living standard of society, the inequality and poverty problem reduced and helped to decrease the crime rate and any other social evil that would harm the society. This is how the Zakat system makes a difference towards the society.
TYPES OF ZAKAT
Zakat is divided into several types:
Zakat of Income
Zakat of Savings
Zakat of Business
Zakat of KWSP/LTAT
Zakat of Share
Zakat of Livestock
Zakat of Gold and Silver
Zakat of Crops
Zakat of Income
Extra payment received by an individual from their employer or individual itself in the form of physical energy or physically or professional employment for specific day, month and yearly also been required to pay Zakat.
Employment income includes: –
The annual salary
Other allowances
Unpaid wages
Other remuneration such as bonuses, etc.
Method of Calculation
First Method
Using gross income (without deduction) 2.5% on gross income per year.
Example:
Total gross income per year: RM 25,000.00
Amount of Zakat (2.5%): RM 625.00
Monthly Payment: RM 625.00 /12 = RM 52.08
Second Method
Using the net income (Income year less allowable expenses per year) x 2.5% Expenses allowed deduction (per year): -:-
Self: RM 8,000.00
Wife: RM 5,000.00
Children: RM 1,000.00
KWSP: 11% from gross income workers
Parents Contribution: RM (amount given) per month x 12 months
Contributions to organizations that pay the Zakat (for example: Lembaga Tabung Haji, Takaful)
Zakat of Savings
Contribution of workers and employers to KWSP People Provident Fund , Soldiers Provident Fund (LTAT) are also required to pay Zakat as the concept is similar to savings but the different is savings of KWSP and LTAT could not be withdraws anytime where never they like and it is subject the rules.
Fixed Deposit
Fixed deposit of RM 100,000 was kept for a year without the excluded (assumed nisab charity at that RM 9430.00)
Then charity is required to produce are: RM 100,000 x 2.5% = RM 2.500
Regular Deposit
Method of Calculation
(Duration haul is January 5, 1999 until February 7, 2000) (Assuming nisab of charity at that RM 3,323.50)
So Zakat are:
(Balances with lower interest bank refused WITH) X 2.5%
(RM 9,115.00 – RM 115.00) x 2.5% = RM 225.00
Zakat of Business
Zakat been given out by Sole Prop irate, Partnership, Cooperative Society, Societies and Organization which had reached one year and the time limit.
Method of Calculations
[(Current Assets – Current Liability) + Coordination x Percentage of Muslims Share x ZAKAT ABILITY (2.5 %)].
Zakat of KWSP
Contributions of employees and employers into the Employees Provident Fund (EPF), Lembaga Tabung Angkatan Army (LTAT),or the like imposed zakat as conceptually the same as saving money, but with the difference amount of savings, LTAT and so on shall not be issued at anytime because and subject to regulations that is fixed.
Method of calculation
First Method
2.5% of the contribution that issued once money issued.
Second Method
2.5% of contribution every employee is based on the annual statement
Zakat of Shares
Zakat which is given out for investment which has reached its time limit and minimum value.
Methed of Calculation
2.5 % the value of lowest share – share which is own for one year minus for shared borrowed.
If the lowest value is not determined, use the value beginning early in the year or in the year or whichever is the lowest.
For shareholders which must be owned by investors. Muslims in the long term to gain control a company or firm so his payment for Zakat will be based on the calculations that it will not affect the importance of other Muslims to get hold of the company.
If any of the owner’s shares has not reached one year, but the whole property being changed for a number of time for one year from shares to cash and vice versa, so use the lowest value with the mixture of money and shares, shares with basic to count Zakat multiply 2.5 %.
Zakat of Livestock
Livestock Zakat is property Zakat that required to be taken out in perfect the conditions. Domestic animal that obliged to pay Zakat is among them such as goat, cattle, camel, sheep, and buffalo. Prophet S.A.W said ” From Muaz Ibnu Jabal, had said, RasulullahS.A.W was sending me to Yaman and ask me to collect zakat from each of 30 cows, 1 lamb musinnah (1 female cattle aged up to 3 years ) and every 30 cows, tabi’ or tabiah ( 1 male or female cattle aged up to 2 years).” The livestock that we would like to give a Zakat must be perfect and no defects such as missing the foot or hand and so on.
COWS/BUFFALOES
Quantities
Zakat Amount / Sex
30-39 tail
1 tail, age 1 year / male
40-59 tail
1 tail, age 2 year / female
60-69 tail
2 tail, age 1 year / male
70-79 tail
1 tail, age 1 year / male
and 2 tail, age 2 year / male
80-89 tail
2 tail, age 2 year / female
90-99 tail
3 tail, age 1 year / male
100-109 tail
1 tail, age 2 year / female
and 2 tail, age 1 year / male
110-119 tail
2 tail, age 2 year / female
and 1 tail, age 1 year / male
120 tail above
tail, age 2 year / female
and 3 tail, age 1 year / male
GOATS
Quantities
Zakat Amount / Sex
40-120 tail
1 tail, age 2 year / male or female
121-200 tail
2 tail, age 2 year / male or female
201-399 tail
3 tail, age 2 year / male or female
Subsequent additions : Every of 100 tail plus
plus 1 tail, age 2 year / male or female
SHEEP
Quantities
Zakat Amount / Sex
40-120 tail
1 tail, age 1 year/ male @ female
121-200 tail
2 tail , age 1 year / male @ female
201-399 tail
3 tail, age 1 year/ male @ female
Subsequent additions : every 100 tail
Increased by 1 tail, age 1 year / male @ female.
Zakat of Silver and Gold
Gold and silver is a mineral that is required to charity. This is because these metals are very useful as it uses an exchange value of all things. As for other jewelry than gold and silver like diamond, pearl, silk, copper, are not obligatory Zakat on it.
Nisab Zakat gold used = 200gram
Gold Zakat Nisab unused = 85gram
Zakat of Crops
Zakat for basic food after it has reached the stage of satisfaction for the state which is 363 gantang / 1300 kg like paddy, wheat, cereals and so on.
Method of Calculation
First Method
Cereals and fruits which used by people energy, animals and machines will use a lot of expenditure and so that the Zakat is 10 % or 1/10
Second Method
Cereals and fruits depend on rain water, so Zakat is 5 % or 1/20
Third Method
Cereals and fruits depends both as above method, so Zakat is 7.5 %
ZAKAT PAYMENT
When Does Zakat Become Obligation
Only the wealth of Muslims is imposing to Zakat, it is not required from non-Muslim. First, this is because Zakat is one of the Pillar of Islam; it can’t expect any disbeliever to pay it. Second, Islam is one of religion which is prohibiting any action that enforce others accept Islam as one’s religion. In additional, if people just adapt them to Islam they should not be asked any past due of Zakat (the period of disbelief). According to the Shariah, Zakat is an obligatory for any Muslim who is:
Mature
Only major subject to the Zakat, qualify as a Zakat payer. Due to the lack of legal capacity, minor are not under a fard obligation to perform acts of ibadah. They are exempt from paying Zakat by using reason they deficiency of legal capacity.
Sane
As a Zakat payer, he should be sane. Before a child reaches mature, he considers as insane. He is exempt from the payment of Zakat during that period and liability of Zakat is start calculate when he get back his sanity. For another example, although the person was sane at the time of maturity but after that he becomes insanity. This person also exempts Zakat for the period his insanity. The liability of Zakat is calculated from the date of recovery of sanity. On the other hand, if the person only insanity of a part of the year, then his liability for Zakat of that year is calculated, no exempt.
Free
Owns the minimum (nizab)
As a Zakat payer, he must meet all these four conditions. If one condition is not met, he doesn’t have an obligation for the payment of Zakat. Besides, even a child, an orphan, or a mentally retarded person is exempt from Zakat payment but they are required to pay on their behalf. Last, if a person died without pay the Zakat was due, Zakat will take from the estate of a deceased person.
ZAKAT DISTRIBUTION
Categories Where Zakat Can Be Spent
Zakat is only paid to an individual who is really needed and deserve. In the Quran, Allah (swt) says that:
Zakat is for the poor and the needy and those who are in charge thereof, those whose hearts are to be reconciled; and to free those bondages, and to help those burned by debt, and for expenditure in the way of Allah, and for the wayfarer. This is an obligation from Allah. Allah is All- Knowing, All- Wise. (9:60)
According to this, Zakat only can pay under eight categories. There are:
The” poor” and the “needy”
The main objective of Zakat is to reduce or mitigate poverty and destitution in social. The way to achieve it is taken from the rich and rendered to the poor. Actually, people who are “poor” and “need” is different. People whose are categories as “poor” when they are in need but due to modesty and self-respect, they are not begging from others. People who are in need and they are submitted in begging from others are classified as people who are “needy”. A person has become “poor” and “needy” mostly is because they are shortage in their income, they cannot fulfil the essential needs, and they are totally poverty. Besides, “poor” and “need” also includes those are physical disability, old age, or accidental circumstances. According to Al-Qaradawi, full- time students can be in “needy” situation when they are continuing their education.
Workers in Zakat administration
A person who collects and distributes Zakat is the third category of Zakat recipients. Based on Al- Qaradawi, Zakat collection and administration is the function of an organized body paid employees. Workers can receive Zakat as a compensation for their works regardless they are poor or not. Besides, this compensation must compete with the market value of their labour.
Those whose hearts are being reconciled
Five types of people involved in this category, there are:
An individual who is close to become Muslim or whose clans may become Muslim.
An individual who may do evil or harm to Muslim. Giving a Zakat to those people will prohibit them to do it.
An individual who has just become Muslim, Zakat will help them to be engaged with Islam
An individual who has a positive influence on Muslim.
A Muslim who is expected to defend their Muslim land against attract from other. This happens especially when they are living on the boarder of a Muslim country.
Muslim whose influence is needed in the process of collecting Zakat in order to convince individuals whose will not pay their Zakat. This action can avoid having fought between government and whose reject in Zakat payment.
According to some jurists, such as Hanafis and Malikis, this category is not exist since the death of the Prophet but Al-Qaradawi and Mawdudi disagree with it, they state that Zakat recipients in this category have not stopped, but the payment only can make by the Islamic state, not by individual Zakat payers.
Emancipation of slaves
Contracted salves can use Zakat to pay his master in order to gain his freedom. Allah orders Muslims must show respect and give to give slaves who wish his contract is freeing. Besides, Allah also orders master to help his own slaves become freedom if they demand it.
Allah says,
“If any slaves you own desire to make a contract to free themselves, write it for them if you know of good in them some of the wealth Allah has given you”.
Those burned in debt.
According to the Hanafi School, a person is included in this category when he does not have enough wealth to serve his debt. The debts arise from consumer expenditure; it includes medical bills, building a house for personal residence, and marriage. Besides, victims those hit by natural disasters or accident and force them must borrow from other in order to continue their basic life also includes in this category. Zakat also consider as a high quality insurance against the financial effect from natural disasters or accidents.
Before applying the Zakat, four conditions must be met, they are:
The debtor must be in need of financial facilitating.
A person who can cover his debt with his own wealth can not apply from Zakat. Besides, people who do not have sufficient wealth but they still can serve his debt with the income is eligible for Zakat. This condition shows Zakat is not only for a debtor who is totally destitute. Zakat may pay with difference depend on the level amount of debt against the available wealth of the debtor.
The debt must come from Islamically lawful activity, for example borrowing in order to support the family.
Loans are used for activities those are prohibited by Islam cannot be paid by Zakat. These activities include consumptions of alcoholic beverages and over-spending on lawful items. The main reason Zakat cannot be used to pay in these activities is to stop other to do this sin activities.
The debt must be due immediately.
Different scholar has a different idea of this condition. Some scholars approve that if the debt is due after one year, the debtor cannot get Zakat to pay it. Some disapprove of this; they argue that Zakat can give help to debtors regardless of the due date of the loans. One can be confirming is obligations owed to God are excluded in this category.
The debt should by reason of other human beings.
For example, obligation to Allah is excluded in this category. Obligation to Allah can be due Zakat and compensation for breaking a certain condition in Shariah.
Expenditure in the way of Allah.
After concluding the views of the Hanafi, Maliki, Shafi’i, and Hanbali, three points are agreed with them. There are:
Jihad considers a part of this category.
The fighter who fighting for the sake of Allah is lawful to receive Zakat. However the equipment and arms to fight is not agreed with some scholar.
Public works such as building school, mosques, highways and roads, and irrigation canals is not qualified to receive Zakat. Four schools say that this public works have other funds to pay it such as fay’ and kharaj.
Wayfarer
Majority jurists believe that someone who just desire and just start travelling isn’t classified in this category. This is because term ‘Ibn as-sabil’ is meant someone on the road and a person who starts and desire travelling is still staying at home. Besides, a person considers as travellers will cut off his financial means at home. That means no income for him when he is travelling. A person who is desire for travel hasn’t cut off his financial means yet.
The wayfarer is one of a category can receive Zakat because of several reasons which are encouraged by the Quran:
Travelling for purpose work and opportunity.
Travelling can seek more knowledge and ponder on the signs of Allah in the world and on His animal and human communities.
Travel can for the purpose of jihad in the Way of Allah
Travel because of to attend the pilgrimage to the Sacred House of Allah.
Categories Who Can Not Receive Zakat
According to Yusuf al-Qardawi (1999), there are several categories of people who is cannot receive Zakat. These categories are:
The rich people
Zakat has purposed to reduce poverty and destitution in social. In order to achieve it, Zakat will be taken from the rich and rendered to the poor. If Zakat is given to the rich, th
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